U.S. President Roosevelt adopted cash and carry policy in order to provide support to allied countries during World War II against Nazi Germany. Under the terms of this policy, the allies had to pay for American supplies immediately and transport them out of American territory on their ships and under their flag.

When World War II broke out in Europe in September 1939, Roosevelt called Congress into special session to revise the neutrality acts to permit belligerents—i.e., Britain and France—to buy American arms on a “cash-and-carry” basis; over the objections of isolationists, the cash-and-carry policy was enacted.

After a fierce debate in Congress, in November of 1939, a final Neutrality Act passed. This Act lifted the arms embargo and put all trade with belligerent nations under the terms of “cash-and-carry.” The ban on loans remained in effect, and American ships were barred from transporting goods to belligerent ports.

The purpose of this policy was to allow the Allied nations at war with Germany to purchase war materials while maintaining a semblance of neutrality for the United States. Coming out of the Great Depression , the U.S. economy was rebounding.

Before passage of the Neutrality Act of 1939, Roosevelt persuaded Congress to allow the sale of military supplies to allies like France and Britain on a “cash-and-carry” basis: They had to...